IDEAS home Printed from https://ideas.repec.org/a/spr/soinre/v172y2024i2d10.1007_s11205-024-03318-7.html
   My bibliography  Save this article

Aggregating the Human Development Index: A Non-compensatory Approach

Author

Listed:
  • Riccardo Natoli

    (Victoria University)

  • Simon Feeny

    (RMIT University)

  • Junde Li

    (Victoria University)

  • Segu Zuhair

    (Melbourne Polytechnic)

Abstract

The United Nations’ Human Development Index remains a widely used and accepted measure of human development. Although it has been revised over the years to address various critiques, a remaining concern is the way the three dimensions are aggregated into the single index. A deterioration in one dimension can be compensated for by an improvement in another. Since compensability is inextricably linked with trade-offs and intensity of preferences, a non-compensatory (i.e., Condorcet) approach to aggregation is employed in this paper. Although non-compensatory approaches have been employed previously, this paper adds to the literature by undertaking an application of the Condorcet approach to the entire HDI. This approach, which does not use intensities of preferences, ensures that the degree of compensability connected with the aggregation model is at the minimum possible level. To achieve this, country level rankings are then compared to those for the 2020 Human Development Index which aggregates dimensions using a geometric mean. The findings demonstrated substantial changes in rank-order between the HDI and Condorcet approach. This outcome provides empirical evidence which demonstrates that the non-compensatory Condorcet approach can mitigate issues of compensation present within the geometric aggregation technique currently employed by the HDI. These findings have potential implications in aiding the identification and employment of potential policy priorities—specifically, the notion that policy should emphasise the development of a country as opposed to economic growth alone.

Suggested Citation

  • Riccardo Natoli & Simon Feeny & Junde Li & Segu Zuhair, 2024. "Aggregating the Human Development Index: A Non-compensatory Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 172(2), pages 499-515, March.
  • Handle: RePEc:spr:soinre:v:172:y:2024:i:2:d:10.1007_s11205-024-03318-7
    DOI: 10.1007/s11205-024-03318-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s11205-024-03318-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s11205-024-03318-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Paolo Paruolo & Michaela Saisana & Andrea Saltelli, 2013. "Ratings and rankings: voodoo or science?," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 176(3), pages 609-634, June.
    2. Bohringer, Christoph & Jochem, Patrick E.P., 2007. "Measuring the immeasurable -- A survey of sustainability indices," Ecological Economics, Elsevier, vol. 63(1), pages 1-8, June.
    3. Giuseppe Munda, 2016. "Multiple Criteria Decision Analysis and Sustainable Development," International Series in Operations Research & Management Science, in: Salvatore Greco & Matthias Ehrgott & José Rui Figueira (ed.), Multiple Criteria Decision Analysis, edition 2, chapter 0, pages 1235-1267, Springer.
    4. Ebert, Udo & Welsch, Heinz, 2004. "Meaningful environmental indices: a social choice approach," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 270-283, March.
    5. Giuseppe Munda, 2012. "Choosing Aggregation Rules for Composite Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 109(3), pages 337-354, December.
    6. P. Zhou & B. Ang & D. Zhou, 2010. "Weighting and Aggregation in Composite Indicator Construction: a Multiplicative Optimization Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 96(1), pages 169-181, March.
    7. Bouyssou, Denis, 1986. "Some remarks on the notion of compensation in MCDM," European Journal of Operational Research, Elsevier, vol. 26(1), pages 150-160, July.
    8. Van Puyenbroeck, Tom & Rogge, Nicky, 2017. "Geometric mean quantity index numbers with Benefit-of-the-Doubt weights," European Journal of Operational Research, Elsevier, vol. 256(3), pages 1004-1014.
    9. Dasgupta, Partha & Weale, Martin, 1992. "On measuring the quality of life," World Development, Elsevier, vol. 20(1), pages 119-131, January.
    10. Miles Cahill, 2005. "Is the Human Development Index Redundant?," Eastern Economic Journal, Eastern Economic Association, vol. 31(1), pages 1-5, Winter.
    11. Enzo Barberio Mariano & Diogo Ferraz & Simone Cristina Oliveira Gobbo, 2021. "The Human Development Index with Multiple Data Envelopment Analysis Approaches: A Comparative Evaluation Using Social Network Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 157(2), pages 443-500, September.
    12. Matteo Mazziotta & Adriano Pareto, 2022. "Composite Indices Construction: The Performance Interval Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(2), pages 541-551, June.
    13. Mehmet Pinar, 2022. "Choquet-Integral Aggregation Method to Aggregate Social Indicators to Account for Interactions: An Application to the Human Development Index," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 159(1), pages 1-53, January.
    14. Carmen Herrero & Ricardo Mart�nez & Antonio Villar, 2012. "A Newer Human Development Index," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 13(2), pages 247-268, May.
    15. Riccardo Natoli & Segu Zuhair, 2011. "Rediscovering the Condorcet Approach as an Aggregation Technique for Progress Measures," Economic Papers, The Economic Society of Australia, vol. 30(3), pages 368-376, September.
    16. Srinivasan, T N, 1994. "Human Development: A New Paradigm or Reinvention of the Wheel?," American Economic Review, American Economic Association, vol. 84(2), pages 238-243, May.
    17. Su, Weihua & Chen, Sibo & Zhang, Chonghui & Li, Kevin W., 2023. "A subgroup dominance-based benefit of the doubt method for addressing rank reversals: A case study of the human development index in Europe," European Journal of Operational Research, Elsevier, vol. 307(3), pages 1299-1317.
    18. Young, H. P., 1988. "Condorcet's Theory of Voting," American Political Science Review, Cambridge University Press, vol. 82(4), pages 1231-1244, December.
    19. Salvatore Greco & Alessio Ishizaka & Menelaos Tasiou & Gianpiero Torrisi, 2019. "On the Methodological Framework of Composite Indices: A Review of the Issues of Weighting, Aggregation, and Robustness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 61-94, January.
    20. Man Liang & Shuwen Niu & Zhen Li & Wenli Qiang, 2019. "International Comparison of Human Development Index Corrected by Greenness and Fairness Indicators and Policy Implications for China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(1), pages 1-24, February.
    21. Desai, Meghnad, 1991. "Human development : Concepts and measurement," European Economic Review, Elsevier, vol. 35(2-3), pages 350-357, April.
    22. Kenneth J. Arrow & Herve Raynaud, 1986. "Social Choice and Multicriterion Decision-Making," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511754, December.
    23. Sagar, Ambuj D. & Najam, Adil, 1998. "The human development index: a critical review," Ecological Economics, Elsevier, vol. 25(3), pages 249-264, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Salvatore Greco & Alessio Ishizaka & Menelaos Tasiou & Gianpiero Torrisi, 2019. "On the Methodological Framework of Composite Indices: A Review of the Issues of Weighting, Aggregation, and Robustness," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 141(1), pages 61-94, January.
    2. Panagiotis Ravanos & Giannis Karagiannis, 2021. "A VEA Benefit-of-the-Doubt Model for the HDI," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(1), pages 27-46, May.
    3. Giménez, Víctor & Ayvar-Campos, Francisco Javier & Navarro-Chávez, José César Lenin, 2017. "Efficiency in the generation of social welfare in Mexico: A proposal in the presence of bad outputs," Omega, Elsevier, vol. 69(C), pages 43-52.
    4. Ayça Özekin, 2024. "Recalculation of the Human Development Index via Multiplicative Data Envelopment Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 175(1), pages 217-245, October.
    5. Greco, Salvatore & Ishizaka, Alessio & Tasiou, Menelaos & Torrisi, Gianpiero, 2019. "The Ordinal Input for Cardinal Output Approach of Non-compensatory Composite Indicators: The PROMETHEE Scoring Method," MPRA Paper 95816, University Library of Munich, Germany.
    6. Greco, Salvatore & Ishizaka, Alessio & Tasiou, Menelaos & Torrisi, Gianpiero, 2021. "The ordinal input for cardinal output approach of non-compensatory composite indicators: the PROMETHEE scoring method," European Journal of Operational Research, Elsevier, vol. 288(1), pages 225-246.
    7. Jeni Klugman & Francisco Rodríguez & Hyung-Jin Choi, 2011. "The HDI 2010: new controversies, old critiques," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(2), pages 249-288, June.
    8. Stéphane Blancard & Jean-François Hoarau, 2011. "Optimizing the new formulation of the United Nations' human development index: An empirical view from data envelopment analysis," Economics Bulletin, AccessEcon, vol. 31(1), pages 989-1003.
    9. Milica Maricic & Jose A. Egea & Veljko Jeremic, 2019. "A Hybrid Enhanced Scatter Search—Composite I-Distance Indicator (eSS-CIDI) Optimization Approach for Determining Weights Within Composite Indicators," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(2), pages 497-537, July.
    10. Khatab Alqararah, 2023. "Assessing the robustness of composite indicators: the case of the Global Innovation Index," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-22, December.
    11. Leandro Prados de la Escosura, 2021. "Augmented human development in the age of globalization," Economic History Review, Economic History Society, vol. 74(4), pages 946-975, November.
    12. Sebastián Lozano Segura & Ester Gutiérrez Moya, 2009. "Human Development Index: A Non-Compensatory Assessment," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, June.
    13. Maria Francesca Cracolici & Miranda Cuffaro & Peter Nijkamp, 2008. "Analysis of Spatial Disparities by a Structural Equations Model," Tinbergen Institute Discussion Papers 08-058/3, Tinbergen Institute.
    14. Sabina Alkire, James Foster, 2010. "Designing the Inequality-Adjusted Human Development Index (HDI)," OPHI Working Papers 37, Queen Elizabeth House, University of Oxford.
    15. Prados de la Escosura, Leandro, 2007. "International inequality and polarization in living standards, 1870-2000 : evidence from the Western World," IFCS - Working Papers in Economic History.WH wp07-05, Universidad Carlos III de Madrid. Instituto Figuerola.
    16. Nicola Amendola & Giacomo Gabbuti & Giovanni Vecchi, 2023. "On some problems of using the Human Development Index in economic history," European Review of Economic History, European Historical Economics Society, vol. 27(4), pages 477-505.
    17. Neumayer, Eric, 2001. "The human development index and sustainability -- a constructive proposal," Ecological Economics, Elsevier, vol. 39(1), pages 101-114, October.
    18. Leonardo Salvatore Alaimo & Emiliano Seri, 2024. "Measuring human development by means of composite indicators: open issues and new methodological tools," Quality & Quantity: International Journal of Methodology, Springer, vol. 58(6), pages 5275-5307, December.
    19. Riccardo Natoli & Segu Zuhair, 2011. "Measuring Progress: A Comparison of the GDP, HDI, GS and the RIE," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 103(1), pages 33-56, August.
    20. Mohammad Tariq Al Fozaie, 2023. "The 'Bad Behavior Index': A Composite Measure of the Development Hindering Behavior of Individuals and Institutions," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 70(1), pages 115-161, March.

    More about this item

    Keywords

    Aggregation; Condorcet; HDI; Geometric mean;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:soinre:v:172:y:2024:i:2:d:10.1007_s11205-024-03318-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.